Gym and health club insurance provides comprehensive coverage by covering general liability, professional indemnity and property insurance related claims. Before buying gym insurance, gym owner should look out for all the probable risk occurrences and related liabilities befalling on the gym. Identify coverages to include under gym and fitness studio insurance is necessary for risk mitigation and will also help you in setting the budget for your insurance. There are a series of factors such as the size of your business, sum insured, number of trainers or employees which affect the premium amount of gym and fitness studio insurance. Following are the factors on which the cost of gym insurance is decided:

1. Coverage Selection: Gym insurance offers coverage for general liability, professional indemnity and property insurance. Your premium is based upon the type of coverage included in the gym and health club insurance.
The premium cost of gym liability is determined by assessing the risk profile of the professional, the number of clients, specific kind of liabilities, and the size of the gym or fitness studio. The potential risk involved in the services provided such as pools, climbing walls are also assessed before calculating the premium.

For property insurance coverage, the extent of cover influences the premium amount – such as the value of assets, the market value of property or building, number of machinery or equipment, coverage opted and amount of sum insured.

Read About: What is covered under Gym Insurance?

For professional indemnity insurance, the premium amount gets affected by the experience and qualification of the professional, safety measures opted by the insured, past claims of error and omission, and the reputation of gym or health club.

2. Add-on Cover: Gym insurance has various additional extensions to provide total protection against legal liabilities. Cost of gym and fitness studio insurance increases if you include these coverages. These extensions include an EPLI cover, terrorism cover, machinery breakdown etc. For the EPLI cover, a number of employees working in a gym is a crucial factor in order to determine the cost of gym insurance. Besides regular cover for your gym and fitness centre, you can also cover rock climbing walls, hot tubs, swimming pool and skin care services.

3. Other Factors: Factors like annual turnover, number of clients, claim history, limit of sum insured amount, multiple locations, size of business, the vale of assets are key factors which affect the premium amount of gym insurance.

Case Study: Arnold gym has its fitness studio in multiple locations. It is one of the reputed fitness studio chains in India and provides multiple health care services to its clients. The gym has the total asset value of worth Rs. 3 crores inclusive of property market value, a value of equipment and machinery etc. It has bought gym insurance policy with a sum insured limit of 1 crore. It has selected less sum insured as compared to the value of assets in order to lower down the premium amount of the insurance. Later, it’s main outlets faced a mishap and got completely destroyed because of fire which resulted in a property insurance claim. The loss occurred to the gym is of Rs. 2 crore. The claim has been reported to the insurance company. Although the company has gym insurance to mitigate this risk the limit of indemnity is not optimum. The insurance company will settle the claim up to the limit of sum insured and insured has to bear the rest of the loss. In such cases, if the optimum limit of sum insured would have opted, complete settlement cost would have been recovered from the insurer.

Also Read: What types of claims can be covered under gym and health club insurance?

Hence it is important to select an optimum limit of sum insured in order to recover full replacement cost to restore your financial stability after a mishap. One should focus on complete protection rather than low-cost premium amount. If one of your clients got injured because of gym equipment, do you have enough funds to cover the cost of lawsuits, settlement cost or compensation? In such cases, gym insurance provides financial protection to tackle such mishaps or accidents confidently.
Gym insurance provides peace of mind and increases your reputation as you seem to be responsible for your stakeholders such as employees, clients etc.